China Plans to Allow Top AI Firms Limited Access to Nvidia H200 Chips

China plans to allow top AI firms like Alibaba and ByteDance to buy a limited number of Nvidia's H200 chips, signaling an easing of restrictions amid a computing crunch. The total allocation could be under 200,000 chips, less than half of what was requested. The move comes after Chinese officials had previously withheld approval despite the U.S. government allowing the sales, a situation that had reduced Nvidia's China market share to nearly zero.

China approval for H200 chips

• ▪To get approval, the Chinese companies must specify how many chips they need and for what purpose.
• ▪China plans to allow its top AI companies to buy a limited number of Nvidia's H200 chips.
• ▪Chinese officials have informed Alibaba, ByteDance, and DeepSeek that they may soon receive permission to purchase H200 chips.

U.S. export controls

• ▪Despite U.S. approval, Chinese officials had previously withheld their own approval in an effort to nurture domestic suppliers.
• ▪The U.S. government has previously allowed Nvidia to sell its H200 chips to China and licensed about 10 Chinese firms to buy them.

Limited allocation details

• ▪The potential allocation of under 200,000 chips is less than half of what the companies requested earlier in 2026.
• ▪Beijing is still determining the exact number of Nvidia chips to approve, which could be fewer than 200,000 in total.

Nvidia market position in China

• ▪Nvidia CEO Jensen Huang stated in October that the company's market share in China had effectively fallen to zero due to U.S. export controls.
• ▪Nvidia's shares rose 1% after the report on China's plan was published on July 8, 2026.

Computing capacity shortage

• ▪The H200 processors are used for developing artificial intelligence models.
• ▪China's potential policy shift is attributed to a growing computing capacity crunch faced by its tech companies.

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